Join us every fortnight when we'll be taking a look at the UK housing headlines making the rounds. Breaking down the key information and giving you our thoughts!
Leasehold flats are being banned by the government
The UK government has outlined plans to terminate the leasehold system and introduce commonhold system as a replacement, giving homeowners more control over their properties. Under leasehold, homeowners own their property but are required to pay ground rent and service charges to third-party landlords. Therefore, homeowners often face rising costs and limited decision-making power. The proposed commonhold system would allow property owners to collectively own and manage their buildings, eliminating reliance on external landlords. This will
give property owners decision-making power over service and maintenance fees. Also, to address concerns from mortgage lenders, the government has proposed strict regulations to ensure management of commonhold properties.
Labour, which pledged to end leasehold, detailed its proposals in a Commonhold White Paper ahead of a draft Leasehold and Commonhold Reform Bill. Similar reforms were previously promised by the Conservatives but many were never fully implemented. The timeline for the new law remains undetermined, as it must go through parliamentary scrutiny before being implemented.
Lumensol Says: “Commonhold has been talked about for a while, the drive to stop all new flats being sold as leaseholds is an interesting proposition for a number of reasons such as ground rents being abolished, outright ownership and equity build up with value that will not diminish over time, as well as the control over how the communal areas are maintained and managed. The reform promises clearer language for contracts which is a welcome ambition for those faced with disputes and wanting to understand the rights and obligations contained in the lease. However, the key to success is the ability to establish effective financial management and maintenance of the asset. It remains to be seen how the existing leaseholders will be able to benefit from the option to transfer to commonhold, and indeed, how mixed blocks will be run.”
Ewelina Sorbjan, Executive Consultant
Angela Rayner rolls out £1.5b pot to boost 75 neighbourhoods
Angela Rayner has announced a £1.5 billion funding initiative for 75 areas across the country, inspired by John Prescott’s New Deal for Communities. Each of the 75 communities will receive up to £20 million over the next 10 years in order to improve their high streets, youth clubs, parks and libraries. Local boards, including residents, will have decision-making power on how the money is spent.
Rayner criticised the previous Conservative government’s funding promises, claiming false existence of the funds. She framed the initiative as a break from ‘levelling up’ policies, focusing instead on direct investment and local decision-making. The funding will be available from April 2025, with projects expected to commence in 2026.
Lumensol Says: “Linking area investment to the community is a key step change putting residents in the driving seat and reflecting how important these social networks are in driving change in their local area.This builds on the increased community focus that both housing providers and local authorities are delivering in managing the services that they deliver. This focus on community involvement is equally as important to consider when delivering new services – such as housing – or updating existing services – such as housing patches – as resident’s views are often considered too late in the process.”
Anna Benbow,Executive Consultant